The effect of interferon gamma gene expression in human lung epithelial cells was studied in primary cultures of human epithelial cells. Functional genomic studies were carried out using an Affymetrix platform. Human lung epithelial cells were treateed with interferon gamma or dexamethasone or both for 8 or 24 hours. Interferon induced an increase in gene expression of over twofold or greater of approximately 300 genes. Interferon treatment decreased expression by 50% or more of over 300 genes. Cotreatment with dexamethazone inhibited interferon induced changes in gene expression of a variety of inflammatory and cell cycle genes. Changes in gene expression were confirmed at the RNA and protein level in 12 genes.